Are you contemplating getting ERP software for your business? Do you feel your small business needs ERP software? To answer these questions, let's look at what constitutes ERP and how small and medium enterprises can benefit from it.
What is an ERP software system?
Enterprise Resource Planning software helps a business run all its processes smoothly. These include sales, finance, human resources, accounting, supply chain, and manufacturing. With a central database, integration of all processes happens in real-time.
There are two types of ERP software based on the range it covers. A Full ERP software works for a wide range of businesses, whereas Industry-specific ERP is suited for specific industries.
Types of installation and their benefits
Whichever ERP software you choose for your business, installation is done any two ways. One can be the On-Premise installation, which means the software installation happens on the company's computers. This method is expensive and hence used by large business enterprises. The benefit of this method is, of course, high security and customization. Large businesses profit from On-Premise installation in many ways.
The Cloud installation is the latest development in ERP software installation, where you can access business functions via the cloud. Here the software is hosted on the server directly. This method reduces the overall cost drastically. There could be some security concerns with Cloud installation, but the latest technology in cloud computing makes it minimal. The software here is less customizable but works well for small businesses whose processes are not too specific.
Pros of an ERP system
Now that you understand the basic concepts of ERP, we list down some of the benefits for small businesses:
- Efficient Management : Having consistent data throughout your enterprise is crucial for positive business outcomes. With all data in a central database, you save the time and effort required to run the business. Management of processes is effective as budget planning can be done in advance. It reflects in the savings of your company. Once data and resources are optimized, it helps you focus on core aspects of business innovation. You can stay ahead of the competition with ease.
- Reduce errors : As ERP systems are robust and accurate, the chances of errors on your part reduce considerably. With the ERP software in place, you can predict events and avoid any risks involved.
- Increase employee interaction : When you use a central database, it helps employees easily search for information at a click of a button. Employees can interact with each other over the processes through online communication channels in the ERP system.
- Increase customer satisfaction : The result of the ERP system is a superior product that customers are happy to purchase. Using the Cloud installation method is a perfect way to handle customer concerns. The chatbot service makes query answering quicker and effortless.
- Predict changes : The benefit of an ERP system is the ability to predict demand and supply trends for a business. Using statistical analysis and evaluating sales, you can see future changes that may be crucial to the enterprise.
Components of an ERP system
So, the next thing to consider is the main modules that your ERP system should have.
- Finance : The core process of any small business is finance and accounting. The ERP system generates financial reports and audit statements. This module helps the smooth functioning of the enterprise.
- Human Resources : As your small business grows larger, employee information can get tricky to handle. HR processes, when streamlined, are integral to the day-to-day running of the organization. The module generally includes recruitment, attendance, leaves, payroll, etc.
- Sales and Marketing : Using the information in this process makes it easy to forecast trends in the market. Sales data give marketing campaigns a boost and clarity.
- Supply Chain Management : With this module in place, businesses can have a bird's-eye view of the entire supply chain system. Managers can handle the flow of goods and services and keep track of the end-to-end order fulfillment.
- Customer management : The focus of every organization is customer satisfaction. With the customer service module in ERP, giving your customers what they want is easy and effective.
One last check
With the above information in hand, you can now choose the best ERP software system to fast-track your business. There is various software available in the market that may seem conflicting. The best way to check if it is a right fit for your organization is to have a checklist ready.
- Does the ERP system fit in your budget?
- Does it have the scope to grow with your business?
- Can it be easily integrated with the other software present?
- Can it be customized according to the changes in the organization?